Johannesburg, 3 April 2025. The annual PGM mining industry gathered today with a stream of interesting perspectives on the future of the industry being discussed in-depth.
Tariffs and Talking Points
As can be expected, a hot topic on the lips of delegates and speakers was the prospect of the impact of yesterday’s tariff announcement by the US administration.
There is some question still about whether the tariffs would be imposed on minerals as well as manufactured products, but it is likely that for now it will be imposed across the board on all imported products.
Some of the South African mining houses have US based operations that will benefit, at least in the short term but others will be faced with the prospect of having to navigate a rapidly changing landscape.
Many African countries currently charge high tariffs on US products imported and until 9 April have had little or no tariff charges on the products that they export to the US markets. This will now be met with a reciprocal tariff rate on the African imports.
Tarriff Calculation
The tariffs applied in general would seem to have been calculated on the ratio of the trade surplus countries have with the US. In the case of South Africa (SA) as an example, the country has been given a reciprocal 60% tariff and currently charges a 30% tariff on US Imports. SA imports USD 5.8 billion from the US, while the US imports USD 14.7 billion from SA per annum currently.
Using the formulae here shows how this was calculated (1 – 5.8/14.7) = 60.5%
It looks like all the US’s reciprocal “tariffs” are based on similar formulas. For countries where the US has a trade surplus the “tariff” was just set at a basic base of 10%
Source data here: https://ustr.gov/countries-regions/africa/southern-africa/south-africa
Tariffs Will Drive Change and Opportunities
Richard Stewart, CEO designate at Sibanye Stillwater, spoke about the three major impacts that he sees coming from the tariff imposition:
- Things will be more volatile, in particular in the near term with producers having to reset their production and markets they supply. In addition, they will likely drive lower manufacturing production across the globe, with major industries such as electric vehicle manufacturers in places like China, likely to be hard hit.
- Richard points out that from a positive perspective, the change will drive regional supply chains and there will be new supply opportunities created that are currently not there.
- The third major impact is that the impact will make the world a highly transactional one. Where there are needs to get supply of particular minerals or metals as an example, there will be deals build to ensure supply versus import rate exceptions.
Stewart contends that there is much potential for future growth for PGM’s globally and said that the industry needs to collaborate more with industries to develop new and further use for PGM’s in manufacturing beyond the Automotive sector.
Green Economy Likely to Diminish
For the PGM industry in particular Henk de Hoop, CEO of SFA (OXFORD) described the likely impact from cancellation of the US ESA department and the dismantling of the green energy focus will change mid-term prospects for the PGM industry.
The use of PGM’s in battery and gasoline based vehicles will help boost demand, and this will further be impacted by the European region, now having to move budget from green transition programs into supporting the Ukraine in its war against Russia.
The green transition is according to Hek, likely to be moved down the road for now and it will prolong the gasoline based vehicle production worldwide that was set to be curtailed within the next decade.
